Elasticity is denoted by E, so the formula of elasticity is :
E =
Here, we have to find MR in terms of Q and E
Given, Q(p) be the demand function for a certain product, where p is price.
If R is a function of p for the total revenue
It means R = p*Q(p)
And (dR)/(dp) is MR so MR will be, solving dR/dp we get,
MR = p * Q'(p) + Q(p)
But we want the MR in terms of Q and E
And we know that p' = and Q'(p) = , it means
MR = +
And we can write E as
[ ]
Now put value of in MR we get,
MR = +
=
[as p' = dp/dp =1 so =1]
MR = Q(E+1)
MR = Q*E + Q
(Here MR in the form of Q and E)
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